Banks Should Focus on Feeling and Fintech Partnerships: An Interview with Joe Sullivan

We interviewed Joe Sullivan, CEO of MarketInsights. Sullivan outlines what has changed in financial services marketing as well as examples of how to best navigate the change. Ultimately, he says, banks and credit unions must think about how consumers feel in order to win their business loyalty.

What has changed in the past 10 years in the financial industry when it comes to digital marketing?

The number one change is the consumer's increased intolerance for marketing messages. We're in message overload, and we're tired of messages.

So we're seeing the complete shift from traditional marketing. All the traditional things that banks and credit unions are spending their money on, like newspaper, print, and billboards — that stuff is increasingly less effective.

We also seeing the regulatory environment change, which is requiring these institutions to spend time and money on things that they would prefer not to.

But the core thing is that consumers are increasingly intolerant to marketing messages. You probably tune out any message on TV when the advertisements come on, right? So I think that's the biggest shift that I see in the past 10 years.

What should a financial institution do to navigate that problem?

They have got to tap into consumer emotion, and they've got to be presenting something, whether it's content marketing or whatever, so people listen.

When it comes to marketing, that banks and credit unions should be doing that they're typically not doing?

Banks and credit unions must shift from product-centric messaging to customer-centric messaging. I call it the big pivot. You've got to make it about the customer. That's the big thing that must happen. We've got to make it about you, the consumer. Instead of, "thank goodness we've moved past now Bauer 5 star ratings and all of that stuff." If you look at any 5 or 10 banks and credit unions out there, what you're going to see is that they're talking about themselves and not the consumer.

So that's the big shift that has to happen.

Who is a financial institution that is doing it well?

We cannot deny the success of TD Bank. They are making it about the customer. They are gaining emotional traction with the customer. They are saying, "I hear you. I recognize what is important to you." You know, with their automated thank you machines and all those other things. But they're letting you know as the consumer through gifts, through outreach, that they get who you are, and I think that they're a really good example. They're targeting to a mindset. They're targeting for how people feel. We can less target now based on a demographic bucket. We have to target based on how people feel. And whether they're disgruntled with their financial institution, whether they feel like they've been left behind because of the economy. So this is where emotional traction comes into it.

So you might even build a segment around satisfied, disgruntled, is that what you're saying?

That's oversimplifying, but yes. It's saying, "I'm going to target how you feel," because feelings are facts. F-A-C-T-S. So if you tap into that, that's where people buy. Whether it's a house, a car, or whatever, and financial institutions are not doing that as effectively as some other global brands are doing it.

Interesting. What other emotions would you pinpoint?

Gratitude. We're going to help you with your financial struggles. We're going to help you get to the other side. A lot of our work in the upper mid-west has been with financial institutions in dying or decaying towns, and the customers who live in those towns have not participated in the economic recovery post-recession as somebody in say Austin, Texas has. We understand your financial pain, and together our financial institution and you will work together to help you rebuild your finances, to rebuild your credit score, to help you dig out of debt. Whatever it is. So those are helpful things that a financial institution can do to be a working partner with the customer.

That last one sounds a little bit like empathy.

You know the best example I can give you is we did do a project in Indiana where, I reference them but not by name, their clients were decimated by the financial crisis. They lost their houses all that kind of stuff, and what this bank did is really say we feel that, we get that, and together we're going to work with you to rebuild. Metaphorically and physically.

That's great. Let's talk a little bit about Market Insights, since you mentioned that project. What other notable projects, or just general help do you provide?

At the most core level we help our bank and credit union clients understand the market. So demographics, psychographic data, segmentation, product behavior. We help them get a clear picture as to the market and then set out a strategy whether it's what to do with their branch network that no one goes into anymore, and do they need to reposition or close branches, or consolidate. To developing a marketing strategy that is related to the segments that they can really be successful with. To branding. To strategic planning. But all of it is we give them the data and the research and the strategic support to lay out their options and work with them so they make choices to realign their physical plan, their processes, their products, their people to fit with where the world is headed and not where it's been. So data-driven strategic support.

What should banks do about fintech companies?

They should embrace it and say thank you. I gave a speech recently, the one I mentioned to you, and there's all this talk about should they partner, should they not. But look at it this way, at the most basic level, a fintech type company, what do they have in terms of advantages? They have innovation. They have a lack of legacy systems that they have to drag around and band-aid and do things with. They are quick to market. They can attract capital. All of that. What does the bank or credit union have? They have customers, loyalty, trust, the expertise dealing with the regulators, and those two things combined, take consumer lending as an example. If you're not one of the large money center banks, they say can we even compete in this? Well, with some of the fintech solutions on the market and being created right now to bring and deliver a consumer loan to a consumer for 7,000 hours it can be approved and funded within minutes on a mobile app. That's where the benefit of that, they can reduce their cost of competing in services that they said ordinarily we can't compete in that, it's too expensive for us.